Originally Posted by PokerXanadu
Although we are saying similar things, I disagree with your logic in regards to the illegal gambling charges. The monies being returned to US players are obviously not being categorized by the DOJ as "proceeds of illegal gambling". If that were true, players would never see the money.
The DOJ is clearly making a distinction between player money and the proceeds of conducting an illegal gambling business (i.e., the business revenues generated by collecting rake and fees).
The DOJ specifically avoided labeling player cash-outs (winnings) gambling proceeds, which is why they ended up failing so miserably to state their claim, they tip-toed around using the Travel Act which would have made their claim virtually bullet-proof, but left players holding the bag if they did.
But if it's an illegal gambling business, they could have been able to order return of unplayed deposits, but the winnings would not be a lawful debt, so if they ordered PokerStars to repay those winnings, it would run the (realistically non-existent) risk of PokerStars challenging that order, but more importantly it would give Scheinberg, Bitar et al ammunition to say that if the debt was lawful, the gambling couldn't have been illegal.
Report was that one of the issues holding up the deal was that PokerStars wanted to handle US payouts, which makes sense for exactly that reason, it would have been a further stamp of approval for the business they conducted in the US.
Your point, that having victims to the fraud allegations certainly does boost their case, so even if the legality of the player debt wasn't in question (i.e. we were only talking about deposits) they likely would still have wanted to handle the payouts for that reason.
But since any argument in favor of the legality of the debt for poker winnings (that the poker play occurred in a jurisdiction where it was legal, e.g.) would have also been an argument in favor of them not violating the IGBA, so the offer from PS to accept an order to make FTP US player repayment was setting a brilliant legal trap - well, maybe not brilliant since the DOJ didn't bite.